Food Insecurity in Asia
Through 2007 and 2008, as the financial crisis was unfolding in the U.S., a food crisis was raging through most of the developing world - especially in Asia. Rapid increases and decreases in food prices across the developing world exacerbates the plight of communities that are already suffering from poverty and hunger. Hunger persists in Asia - even in China, India and Vietnam - countries that have already been experiencing unprecedented rapid economic growth over the past decade.
As part of our philanthropic education initiative, Give2Asia presented a private gathering that brought together leaders from the Filipino community along with advisors from the local areas to discuss these issues. Dr. Bruce Tolentino, Director of Economic Reform and Development of The Asia Foundation, shared his perception of the food price crisis and how donors could help. The topic, "Food Insecurity in Asia" was hosted by Mr. Robbie Fabian, Resource Development Consultant and Mr. Joe Lumarda, Trustee of Give2Asia and SVP of Capital Group Companies. Held in the boardroom of the California Community Foundation (CCF), Ms. Carol Bradford, VP of External and Donor Relations of CCF opened the event with a brief introduction of the Foundation's work.
What caused the recent volatility in food prices in Asia?
Dr. Tolentino pointed out that in the mid-2008, the prices of basic foods reached their highest levels for 30 years. Asian rice yields have been continuously growing and there have been no shortfalls in rice production or physical shortage of rice on the world market. Declining world rice stocks were not the trigger for the price bubble. Dr. Tolentino then pointed out several factors behind the volatile food prices:
(1) Rice yields have lagged behind population growth.
(2) Mistakes were made in trade strategy and policy, worsened by panic, leading to hoarding by governments, farmers, traders, and consumers across Asia.
(3) The 2006-2007 drought in Australia caused a spike in wheat prices and a shift of demand to rice. Several major exporters began to restrict rice exports in 2007. India, after initially banning exports outright, restricted exports of rice in early October 2007.
(4) The situation was partly exacerbated by political posturing. Politicians do not want to be seen as "doing nothing" about a developing situation. The sense of urgency, stoked by media hype, began to turn into panic.
Dr. Tolentino then shared his thoughts on how the impact of high food prices on the poor:
(1) In 2007 and 2008, mainly because of high food prices, an additional 115 million people were pushed into chronic hunger. The poor spend most of their income on food.
(2) By virtue of size, China and India alone account for 42% of the chronically hungry people in the developing world.
(3) The largest increases in the number of undernourished people as a result of rising food prices have take place in Asia and sub-Suaharan Africa.
What then, are the opportunities for donors to prevent or mitigate the negative impact of volatile food supplies and prices?
Dr. Tolentino stated that: The need to protect consumers from higher food prices must be balanced against maintaining incentives for steady and continuing productivity-raising investment in agriculture. Small-scale farmers in Asia continue to need help, particularly in enhancing their access to public goods that generate broad benefits for farmers and non-farmers alike: irrigation facilities and efficient water management, science-based production technology, extension and communication services, efficient transport, secure rights to land, access to financing, and rational, stable policies.
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